Denton Development Districts

The City of Denton does not participate in Type A or Type B sales tax collection, which is generally used to fund a variety of economic development projects. Instead, Denton uses other tools offered by the State to municipalities to publicly finance needed improvements and enhance infrastructure to stimulate private development and redevelopment. State law allows for several different types of development districts. Currently, Denton has two Tax Increment Reinvestment Zone development districts.

A Tax Increment Reinvestment Zone (TIRZ) is a tool that local governments can use to publicly finance needed structural improvements and enhance infrastructure within a defined area in order to stimulate private development and redevelopment. An ad valorem valuation base is established in the first year, and the revenue from the increased valuation from subsequent years is allocated to TIRZ development. The statutes that regulate Tax Increment Financing are located in Chapter 311 of the Texas Tax Code, also known as the Tax Increment Financing Act.

Once a TIRZ is established, a board is appointed. Its first tasks are to create the feasibility, finance, and project plans for the TIRZ. Each year, the TIRZ Board approves an annual report covering the activity of the TIRZ, which is presented to the governing body for approval and submittal to the State.

On Dec. 7, 2010, the Denton City Council adopted Ordinance No. 2010-316, designating and describing the boundaries of Tax Increment Reinvestment Zone Number One (Downtown TIRZ) to provide the public infrastructure necessary to encourage redevelopment in downtown.

The Downtown TIRZ took effect on Jan. 1, 2011, and will terminate on Dec. 31, 2041, or when the budget of $24.8 million has been reached. The City of Denton is the sole participating jurisdiction.

On Dec. 17, 2012, the Denton City Council adopted Ordinance No. 2012-366 designating and describing the boundaries of Tax Increment Reinvestment Zone Number Two for an industrial district of Denton, Texas; establishing the duration of the Zone; establishing a Tax Increment Fund; and establishing a Board of Directors for the Tax Increment Reinvestment Zone. The City’s second TIRZ consists of approximately 800 acres and is located north of Airport Road. This industrial area (Westpark) lacks the public infrastructure necessary to encourage development.

The Westpark TIRZ took effect on Jan. 1, 2013, and will terminate on Dec. 31, 2036, or the date when all project costs are paid and any debt is retired, whichever comes first. It is estimated that the TIRZ would generate approximately $14.3 million over a 25-year period for infrastructure improvements. The City and Denton County will contribute $10 million and $4.2 million into the TIRZ fund, respectively. According to the Finance Plan, the City would retain $43.9 million and the County would retain $18.8 million of real and business personal property revenue over the life of the TIRZ.